Market Backdrop: Hard assets and commodities are benefiting from renewed interest, with generalist capital rotating in and early-stage allocations to gold rising.
Gold Developers: Bullish stance on gold persists, with developers viewed as undervalued on conservative assumptions and likely M&A targets as producers seek to replace reserves amid expanding margins.
Copper: US stockpiling and tight concentrates drive prices despite rising inventories; near-term looks full, but structural deficits later this decade support preferring top-tier developers with M&A potential.
Uranium: Demand tailwinds from AI data centers and reactor life extensions, SPUT buying, and potential US policy support underpin a constructive view; term vs spot dynamics favor further spot tightening.
Aluminum: China’s capacity cap, Indonesia’s power constraints, and high global electricity costs imply sustained tightness and the need for higher prices to incentivize smelting capacity.
Tin: Tight supply from disruptions in Myanmar/DRC and steady electronics/data-center demand create a positive feedback loop, with buyers building inventories and supporting prices.
Geopolitics & Deglobalization: Weaponization of commodities (steel, rare earths) and strategic restocking by nations elevate metals pricing power and inflation risk, supporting long-cycle investment cases.
Large-cap Miners & Index Flows: A potential Rio Tinto–Glencore tie-up would reshape index weights and raise cultural/asset-fit and coal spin-off questions, influencing passive and benchmarked capital flows.
Transcript
I mean, I suppose the only frustration for, you know, people like me when you have these generalists coming into the space. I mean, it's great on the way in, but they don't like commodity investing is they they hate the space. And so, you know, the moment that something wobbles or goes a little bit wrong, like they sell and sell hard and get out because they they never wanted to be there. >> Exactly right. Exactly right. >> All right, money miners. We are a man and a half down with Trav being a good son supporting his mother up in Singapore for her birthday. But we have Sammy Barish to more than make up for it. Sammy, what a start to the year it's been. First two weeks. >> Ah, it's um it was it's enough to drag you away from the ashes. You know, the fifth test um like the headlines, you know, the first couple of weeks, you just want didn't know what was going to happen next. Um between Iran and gold going through the roof and then now Trump wants uh Greenland and then you throw some, you know, threatened criminal charges at the chairman and the Fed all mixed up together. It's um yeah been a pretty good start for uh hard assets like commodities. >> Yeah. Yeah, it has. And to to put it in a bit more context, I mean your your returns last year were outstanding across the the two funds that you kind of manage. So it's not as if we're in the um in you know that the very bottom and seen a kind of bounce out of nothing. A lot of funies in the um the natural resources space had had pretty decent 2025s, but it's a real continuation of the theme, right? >> Yeah, it is. it it's um you know de like the December quarter uh last year was quite strong for the entire sector um and yeah it's a lot of those themes um just keeping on going whereas um I suppose the one observation in January is that because the sector has moved so hard and so fast uh it's capturing capturing the attention of of generalists and investment advisers and and various other asset allocators who are underweight the space and that underweight is hurting their relative returns and so you know the level of inquiry um you know just in January for you know getting more money or putting money to work in the space has been quite acute so um you know that can lead to a bit of frothiness so it's you know can be a double-edged sword but still that's what's happening at the moment >> how far along in that process do you think we are >> I think pretty early stage um there was some uh interesting um uh sort of recommendations coming out in December about uh you big banks advising their you know high net worth clients that they should add you know another percent or or so to their um to gold for example as part of their their asset allocation and and across you know Europe and the US like what that means in terms of gold demand is is quite staggering. So um you know if people are looking to uh you know primarily gold but also secondarily the other commodities as alternative stores of value to you know fiat currency well that process is um in it is in its infancy. Um and again it can lead to frothiness but um I think we're you know we're closer to the beginning than the end of of that process. Yeah, you see a lot of top investors around the world talking about a 60 2020 20 types of portfolios where the allocation to gold is is unlike anything we've seen in the last 100 years, but it still seems as if we're pretty far away from that actually happening. >> Yeah. I mean, again, you know, these people aren't idiots. They don't want to be buying the top. So, you know, if prices start running away uh too quickly, um I suspect they'll hold back. But that that latent demand, I think, is still there. So, you know, you'll end up with um higher lows and higher highs as dips um continue to be bought, you know, until some point that the macro changes. But um yeah, I don't think it's changing u you know, materially anytime soon. >> So, when you when you think about this period in history and and what commodities are doing, what what other period do you do you reflect most on? And I know the the 70s is is one you've spoken about, but what what sort of matches and what doesn't match with with that era? >> Yeah, it's a it's a it's a good point and you know, everybody wants to sort of find the analogy to give them themselves a little bit more um conviction in in forecasting what's going to happen next. And I think the the environment we are now is certainly um has stronger similarities with the 70s than the last commodity boom um which was obviously China demandled. Whereas in the 70s, you know, there was a um an energy crisis, a shortage of oil um that was uh you know, geopolitically um led um and that that you know was very inflationary and that that flowed into um into a lot of other hard assets around the world. So you know today um we've got China and and the US competing over you know various metals. Um you know certainly the the US has built up huge inventories of copper over the last 12 months. Um they're discussing you know building strategic reserves of of rare earths and um I think there'll be more metals added to that. So they're the echoes that we get. It's more a um a sort of a restriction of flow of commodities around that's driving prices as opposed to a a traditional sort of demandled deficit. Um that said, I mean going into 2026, I mean demand does look a little bit better than it did in 2025. So that's helpful. But that sort of deglobalization trade and and you know restocking event um by countries around the world as they look to secure their own commodities, that's really something to watch um to determine sort of the trajectory of metals prices on the way forward. >> Yeah. When when we think about how wild the the past year and the past couple weeks have been, the the 70s are a really interesting example because oil jumps about four times in in one year, I think, in 1973. Over the decade, gold, I think, was up 20x from being pegged. Silver goes from like eight bucks to to to 50 bucks. So, these are these are crazy movements in the in the metals. >> Yeah. And it's and then you think, well, you know, what what brought that bull market to an end? because it went, you know, more or less for eight years. I mean, there were some spikes along the way and it ended when, um, I think Paul Vulker um, you know, took up chairmanship of the Fed and then he hiked interest rates something like 20% to combat inflation and that snuffed out the market and and that was that. Whereas today, with the amount of debt sloshing around the world, if any Fed chairman tried to do anything like that, like it would cause massive massive issues. So, you know, pulling that interest rate lever is is going to be much more difficult and and obviously, you know, Trump's um railing hard against uh against any suggestion that that could take place. Um so, it's it's not clear what's going to bring sort of this sort of scenario um to an end. I mean, you know, commodity prices go high enough, you end up with um you know, supply, sorry, price induced demand destruction, like people just can't afford to use the the commodities for um for all applications. So that brings um demand down a little bit, but uh again, you know, we're I think we're at the more much closer to the beginning of this this um you know, rally than than the end. >> Yeah. Yeah. Well, love him or loathe him, Elon Musk was tweeting, I think the other day that the silver rally is not good given the the kind of industries he works in as well, how much silver is used as as one of the top conductors in in the world and humanoids and anything else they want to build battery related. So there's very real kind of consequences on on that kind of front. If if we look to to Asia kind of getting a bit closer to home from from the US now it's interesting to see some of the data and you flagged some of the PMI data which in in simple terms I think people can think of as a lead indicator potentially on on metals demand, commodities demand. What are you sort of sniffing out from there? Uh I think it's we're finally starting to see a bit of um traction of the stimulus efforts um over 2025 sort of flow into the the real um you know the real world and and that's reflected in those PMI numbers um for for Asia. So for for much of 25 um you know you had the big sort of uh you know hissyfit over Trump's imposition of tariffs in April. Um you know that did impact the US demand. it did impact Chinese um demand for commodities. Um the Chinese uh were very selective in how they chose to stimulate their economy to just try and keep things on an even keel. You know, more focused on consumer electronics, EVs, um manufacturing basically. Uh and bit by bit that stimulus appears to have been um you know effective now and and we're starting to see PMIs turn positive. But the other um factor which is you know different from the last commodities boom is that the delta in Chinese demand seems to be flowing through their exports. So it's basically rest of world demand as you know as expressed through Chinese exports which uh is the area that's surprising to the upside. So you know this commodities rally at the moment feels much more broad-based from a demand point of view than you know the very China ccentric uh rally that we had through the 2000s which is which is interesting. >> Yeah. Yeah. I mean steel steel is what comes to my mind like the the the amount that China is exporting in steel has a bunch of ramifications but firstly it tells you what the demand overseas is like >> and and secondly what it's doing to any other domestic steel making blue scope here in Australia for the bits that they do >> produce here and the the Europeans just begging for for tariff and subsidy type protection for their their industry where where does that kind of go like it. I don't think you're too far off the mark in thinking that part of this is is deliberate from from the Chinese and how they think about it. Or is it all just property market collapsing? >> Uh I think I think it's a bit of a bit of both. Like the you know the Chinese construction and property markets been you know has been horrible for years now. It's not doesn't look like it's going to get any help either. Um but at the same time like you've had legit growth through you know Vietnam, Indonesia um you know the Azian nations in general and you know they they do have you know they they're drawing more um more steel into those countries and so um you know I think it's it's just you know the that sort of population base which when you include India is actually much bigger than China um you know they've their growth has been quite rapid for a long time But finally it's starting to compound off a off a reasonable base and is and is moving the needle a little bit more. But um just on the steel exports uh there was a very interesting headline in J uh I think it was yeah first week of January around China requiring um any steel exports to get sort of you know federal government approval before you know before they're um they're allowed to export steel out of the country. Now, um that's been, you know, sort of a rubber stamping effort to date. But as the world becomes more reliant on China for steel because their exports are a bigger part of of um rest of world demand, uh if they were to slam the brakes on those steel exports, it would, you know, it would be ruinous for, you know, construction costs around the world because, you know, the China exports is having such a big influence on setting the price. And we can see, you know, the amount of leverage they have in the rare earth market. you know there is potential for something similar in steel and possibly in aluminium. So you know this weaponization of commodities um could spread and not to say it will but you know the the mechanisms are there for it to do so. So on on the back of that has has your thinking I mean I remember having you in this room and about six months ago we we were speaking about the um all the checks that our government had been writing to traffic ura as the glen cause of the world here in Australia for their downstream metals processing mainly in the base metal space >> and that has all come off the back of the the weaponization of of this and it's always a bit murky because then you're giving money to traffic or glen cause not exactly a a standup Australian producer, but you've if if you are of the view that you need to have some sort of industry and they're the only ones left, what do you kind of do? So, has your thinking on that changed at all? >> No. No. And I think if anything um it's uh probably a subset of that um speech by the Canadian um PM Mark Carney which has you know gone sort of viral over the last couple of days saying you know it's a we're seeing a change in the you know the the world order and you know all these grandiose armwaving statements. that, you know, if globalization does start to reverse and you can no longer rely um on the free flow of commodities and goods around the world and so we go back to an environment where, you know, countries have to be, you know, to a much greater extent self-sufficient, that's massively inflationary for um for metals prices because we can't compete with um you know, the refining costs, not the mining, like we do mining reasonably well, but the refining costs we we just can't compete with because our power prices are too high and going higher. So, um yeah, I think that uh theme if anything is strengthening. >> So, do we just have to be smarter with with who we pick as partners? >> Yeah, definitely. And I think um I you know I think uh you need to be realistic about the value of these industries because um I think it was one of the economists uh Saul um Kavonic I think his name is um you know came out the other day said oh you know manufacturing jobs aren't any more important than any other jobs and on a superficial level he is right I mean it's it's just dollars and cents however the um the benefits or the fringe benefits that you get from a big manufacturing industry um you know do help lower prices or do facilitate other activities in the economy and for example um take uh the umaring power station in in New South Wales produces I think maybe no a bit more than that maybe 20% of New South Wales power like that was built sort of handin glove with their um uh with the Tomago aluminium refinery so it produces power at a very low price and yes it supports that refinery going into production and making money, but it also supports cheap power prices for the rest of the for the rest of New South Wales and and um for a very long time like that sort of um symbio symbiosis helped um uh Australia become a very low power and power country and and that helps our manufacturing. So you know if that manufacturing dies then also the demand for those big base load um power generation also dies but that means we end up with you know higher power costs um uh you know flowing through the rest of the economy which is a you know a bad thing. >> Yeah. Okay. If we if we change t now there's a bunch of metals a lot of them are breaking through alltime higher semi. So I want to go through them because >> not all the the the reasons are are alike. Some of them are performing strongly for for quite varying reasons. So copper, I want to start with what what are you making of this incredible rally we're seeing there and and what's got us to this point? >> Um well, yeah, I think as as touched on earlier like that the big in big stockpiling by the US um of copper has been a a major driver of the of the rally um to date. In copper inventories around the world have actually been increasing while the price has been increasing. So that's a bit counterintuitive. Um I think the prices are where they are. um because there's a little bit of uh concern in the copper market that those inventories that are within the US won't be allowed to flow back out to the rest of the world should the um uh um sort of LME price rise above the comx price which would then incentivize the flow of copper out of the US. Now if that doesn't happen um yeah it throws back to what we were just just discussing and that you know countries are it's sort of each country for themselves but um you know I think that is a bit of a risk to the downside um for I mean if assuming the sorry assuming the copper does flow out that's a risk to the downside of those prices but I think at $6 you're also going to see it $6 a pound that is um see an increase in scrap supply. So I I reckon copper is looking pretty full um up here. Um where it pulls back to I'm not sure. I think it probably remains quite elevated because you know whilst there has been a a big inventory build last year and you know maybe that's got a little bit of ahead of itself you know looking into 27 28 29 like that structural deficit is is well and truly there. So, you know, that's uh you know, probably a little bit weary, but in the short term, but longer term, um you know, things still look pretty good. >> Yeah. Yeah. Two two follow-ups. Um the first one, and I have almost no experience in this, so I'm curious to to hear what you think, but I've heard with the the inventories that over the past 20 years, there's been a real change in in where the inventories are held. So, it's much harder these days to actually summize what the global state of inventories is. Is this off base or does that sound broadly right? >> Uh I think it is it is difficult but there is also um you know with a big re big liquid market like copper it is worth the while of the various sort of um commodity consultants and banks and analysts etc to you know try and put some numbers to that as best they can. So I, you know, I' I'd be surprised if um that there's any, you know, if there if the rounding errors in these numbers um undermine the you know, the premise that inventories actually have increased >> um a bit around the world. But uh yeah, I mean that remains to be seen. >> Yeah. And and the second um follow-up is TCRC's. They've been a a huge gift to the copper miners that that we know here. I mean, given given their money as opposed to the other way round, how long does that continue? >> I think for a while. I mean, the shortage of copper concentrate um doesn't look like it's going away. Um unless you start to see refineries shut down and sort of, you know, reduce that supply demand um mismatch, you know, by shutting refineries and then that should allow the balance of them to um get some more pricing power in terms of their TCRC negotiations. Um certainly, you know, I don't think any anyone's building any more copper refineries anytime soon. So, um I mean it should, you know, slowly correct itself, but I don't think it's going to be a near-term event. It will take time for the the copper concentrate supply to bit by bit, you know, move in excess of of smelting capacity and and at some and at that point, you start to see a normalization of TCRC's. >> Yeah. Yeah. And at this point in the cycle, are there preferred ways for you to to play the copper? Do you do you like some of the juniors at the moment? Are you safe in some of the producers? Or do you think like copper is such a richly valued place to be at the moment? >> Uh it's a good question. I mean, you know, if a commodity price falls, you know, doesn't really matter what your exposure is. I mean, everything, you know, falls a reasonable amount um regardless of sort of, you know, where it's trading for for fair value. But um I think that the you know the the top tier um or the you know better quality development stories are probably where the value um exists in the market today. So you know the developers never really price in spot um at all. So there certainly there's discounts to to spot available there. Um and you know because of the shortage of you know large and when I say large I mean sort of 50,000 ton and above uh copper projects in desirable jurisdictions I think if uh you know any development story that falls into that basket is is an M&A candidate and so that's you know probably where we'd prefer to look. >> Do you do you spend much time looking at the overseas names? >> Yeah. Yeah. Yeah, I mean there's there's not much left of a of a copper industry in uh in Australia due to all all the M&A and you know Sandfires um you know sits there as as being pretty richly priced as a result and you know a long way below that there is a sort of a growing group of um of of smaller producers trying to get up and running and you know they they've have you know had various struggles over the years because they've been higher cost but yeah their margins would be looking much better now. Um so you know there might be some um uh some opportunities there but you know you just always need to balance that risk and reward um with those guys. >> All right, next commodity uranium. Uranium has been on an upward trend again and everyone is bullish in in the space again. >> Interestingly sput has been buying quite a bit again. So I think >> they're at over 70 million pounds locked up in the in the vaults there never to be seen again. So yeah, interesting dynamics with the the term and and the spot pricing that we're seeing. A lot of the um the miners once again are being priced very very kind of richly. So what do you make of the whole space? >> Um I think uranium is um or is enjoying some tailwinds as being a bit of a proxy to the the AI um data center buildout and the power requirements um that that will that needs. And so every time, you know, the all the big tech stocks in the US have a bit of a sell-off, well, you know, the uranium stocks usually go with it. So that's annoying and it doesn't have anything to do with the fundamental supply demand story. It's just something to be aware of as as noise. Um, you're going to have the uranium market has to contend with. But, um, I think that, you know, it doesn't make any sense for the spot price to be below the term price. you know, if the term market's where all the volume is, you know, why wouldn't you go and soak up pounds in the spot market until, you know, until such a point you get to the to the term price. So, I think that's um you know, that's probably the first move that we're going to see. And certainly the um the split um sorry, the spot ETF uh uh buying will help that happen. But beyond that um yeah I mean it's you know the the deficits you know are looming and um you know those reactors or these new reactors uh you know do need to start contracting you know a long time ahead when they're actually starting to commission and you know there still a few years away but I suppose a sort shorter term you know these Japanese um reactors continuing to restart and and um other existing reactors around the world all prolonging their life um is probably where the you know the incremental sort of fundamental demand is coming from. Um but still today like I mean we saw with Paladin's quarterly report um just a couple of days ago like even at $85 a pound and and yeah sure the achieve Paladin's achieve price was a bit below that they're still not making any money. So you know for big waves of new supply to come on you know the price doesn't appear to be high enough just yet. Yeah, it's remarkable how many all-in sustainings or all-in costs we can see at half the realized cost yet money doesn't drop to the bottom line. And on the on the macro, it was interesting to see MZ, the the leader of Germany, the chancellor, acknowledge finally that it was a mistake to turn off the um the uh reactors. So, a bit more of that rhetoric around the world, I think, will will be seen. >> Yeah, definitely. I mean it was nice that he finally came out and said so but um yeah it was an absolute disaster both for Germany and the environment as well but um anyway Greenpeace can go pat themselves on the back because they were championing championing that um initiative for years. One more question on the the uranium discussion more broadly is the US view. So they've been quite strategic in how they've gone about certain projects certain metals rare earths last year for instance. Do you see them doing something similar in the uranium space picking a national champion? >> I think it's I think it's quite possible. Um certainly, you know, in the when you go through the list of metals the US seems most concerned about they've already underwritten the price for rare earths, I think uranium's quite high up there on the list. And so >> 20% of their their electricity. It's huge. >> Yeah. And and obviously um the demand for you know more and more and more power generation. I mean Trump just wants to saturate the country with as much uh generation as he can to as a means of of stimulating um uh you know GDP growth. So yeah, I it's it's very difficult to sort of forecast, you know, what that what shape that might take, but underwriting an increase in domestic uranium production in the US, I think, is uh, you know, is a sensible bet. Like um I, you know, I I just wouldn't be surprised if they do it. And I think there's maybe a little bit of expectation in prices that that's going to take place, but yeah, you know, we wait and see. But, uh, I think that makes a lot of sense. Are there are there any names in the uranium space you you're holding at the moment you think are still quite cheap or you more likely to trim in this kind of environment? >> Uh it's all I mean I think most of the you know the more liquid names with the exception of you know things like Camo which trade at a big premium to the rest of the market are pricing in more or less spot. Um but a lot of people as a lot of the sort of the um the the brokers and banks don't have forecasts going material materially above where we are at the moment. So that's where the opportunity is. I mean if you take a view that you know uranium is going to go to 150 well you know things look cheap. Um but you know that requires you stepping away from consensus by by a fair degree. So, um I think there's there's still more to play out in terms of what the US is going to do and what that will mean for prices and that's probably keeping you know keeping our holdings as is um for the for the near term but um yeah if any of that changes well you know we'll change our mind. >> Money miners I know we've said it many times now but this year has been a cracking start and last year was just fantastic as well. So you might be thinking it's time to diversify. I know Trav and I spoke about this late last year and we might be getting closer to that time and if you are thinking about that, Exceed Capital is a name you should think about. Exceeded Capital is a commercial property group out of Brizzy, Queensland, and they have been in the game a long time. Now, they've got alignment, something we at Money and Mine love. They are aligned with their unit holders by investing in every single one of the property trusts they put forward to you. Now, they've got a brand new property trust that I want to tell you about, the SP property trust. This is an A-grade office building in the Gold Coast in the mighty state of Queensland. They're targeting 8% peranom cash returns over a 5-year time horizon and they're going to be paying out distributions monthly. If this is something you're keen on and you want to find out more, get into the show notes and click on Exceed Capital. Massive thank you to Exceed Capital for backing money of mine. Now, back to Sammy. Okay, next up, gold. We might be one or two sleeps away from gold breaking through 5,000 US bucks, which >> is barely believable. Even saying the word sounds kind of funny. >> How do you how do you sort of take into account everything we've kind of seen like this latest kick up from sort of 4,400 where it kind of consolidated for for a while has been pretty electrifying again on the back of >> geopolitics and the like. So, how are you sort of chewing it all up and and digesting this? >> Yeah, it's it's really it's really difficult. um as a as a manager to try and um you know you know manage your your exposures to this um appropriately because on the one hand we I mean we do have a big gold exposure and you know that becomes bigger as your your gold holdings um you know rally and I think undoubtedly we've had a confluence of quite positive events for gold over um over the last oh sorry the first couple of weeks of the year and so that's probably added a little bit of froth to, you know, over and above the the underlying um support for gold, which is, you know, a bit of skepticism that around the the value of US dollar and dollars and and just government debt levels globally. Um but every time anyone sold, you know, their gold exposures over the last 18 months, two years, it's been the wrong thing to do. So um you know I I must admit like the meltup in price we've had over the last um couple of weeks does feel a bit like October last year um after which you know things got a bit overbought. There were stories about you know people lining up in Martin Place to buy physical gold and you know sure enough the price rolled over by you know a couple hundred bucks an ounce um straight after that but here we are back at alltime highs um and the drivers I think for a higher gold price still remain very much in place. So yeah, I mean we just again, you know, anything that's uh looking a little bit frothy or we we see, you know, or foresee um risks to production and downgrades, we you know, probably be trimming those um as uh as as you know, where we see that that opportunity. But, you know, I think the value in the gold market at the moment still sits with the the developers. Um and that's because I think a lot of um a lot of people in the market are sort of slow to you know run numbers to what you know what a development proposition might be worth and um you know I've did this recently the you know you take your generic you know 100,000 ounce producer or sorry yeah 100,000 100,000 ounce peranom project so you need about a million ounces in reserve or um to to achieve that you know I assume $300 million for for cap AEX and um you know even a pretty conservative cost of about 3,000 bucks an ounce. Well, you're going to end up with a MPV for that project of 1.4 1.5 billion. You but that's not what these development projects are being valued at as it's nowhere nowhere near it. So, you know, even if the B gold price was to pull back, you know, a couple hundred bucks an ounce, um I think these um you know, projects that look like they're able to be permitted, you know, no fatal flaws, um they will uh you know, endure in terms of their share price and and you know, should um continue to outperform on the upside even, you know, even in a bit of a pullback. >> And you expecting some of the producers to to jump on these opportunities? >> Yeah, definitely. I mean, this one of the reasons that I suppose generalist investors hate commodities is because it's an industry of depleting assets and modeling that is is difficult is different to modeling an industrial company and >> it just doesn't look as good when you don't have the terminal value that just goes on. >> Yeah. You know, you got to replace your resources and reserves. Um, but for producing companies, that's becoming cheaper and cheaper. I mean, the margins of of some of these gold companies now start starting to look like software companies. is I mean on the back of the envelope um I had looking at Capricorn which you know one of the lower cost producers like their eB margins are like you know high7s you know possibly touching 80% today with a spot price move I mean that's that's like a software company but um so the capex hurdle to replace those reserves because capex and costs aren't going up anywhere near as much as the gold price is you know it's becoming smaller and smaller and so that lends itself to um to M&A um if they don't you know have the resources themselves. >> And interestingly with with the Capricorn example, they've been very disciplined about not recutting the the or body and and changing the assumptions going into that. Do you think we've seen sort of discipline across the board from the from the producers there? >> Yeah, I think to um to the extent possible, I think you have. Um I still feel that um throughout the mining industry in general like the scars of um the last commodity boom are still present and the memory is still there where you know people just let costs run you know uh unchecked because you know revenue line the revenue line was growing so much whereas this time round by and large I think cost discipline is much better um and margins are you know they are increasing whereas is you know in in previous cycles you sort of saw you know the you know 90th percentile of costs almost tracked the commodity price or or the gold price specifically you know almost in parallel whereas re more recently gold price you know has gone sort of exponential and costs are are reasonably stable at the moment so um you know those margins uh are increasing and you know to your point that that cost control is much better >> yeah you said scars of the last boom and I couldn't help but think of Rio Tinto And I haven't actually spoken um on the show about Rio and and Glen Coror because it's it's just such a big deal and it's it's hard for a lot of people and it's not that meaningful for a lot of people at the smaller end of the market to have a strong view on this one way or another. But are there sort of ramifications of this type of deal or are there um little caveats to it that you think are kind of interesting for for investors or or speculators to kind of think about? Yeah, I think probably the the one factor that will jump to um particularly institutional investors minds uh very quickly is what the index ramifications are for such a merger. Um because if you know BHP's waiting in the you know all the ASX 200 I suppose is is monstrous and so it demands attention for people who are benchmarked against that index. if something similar was, you know, if Rio and Glenor were to get together, you're gonna end up with a similar scenario because there would be a bigger company than um than BHP. So, um you know, that's certainly one one part of it, but um from an operational point of view, I suspect the cultures are quite different between the two. Um I mean you know Rio's got um you know has a has a finger in the pie in sort of in terms of African developments via Sim do you know how they go operating in the in the DRC with Glenor's copper mines there um is a bit of an open question. I mean Glenor seems to do okay but it is it is tough >> very hard to see Rio operate in the DRC. Yeah, I I'm not sure I'm not sure how, you know, their very sort of straight laced approach is going to going to work in um in that country uh on a number of fronts, but um and then there's another question of what happens to the coal assets that Glenor's got. You know, do they get spun out as a sort of a you know u spin co to try and clean up Glenor to make it a little bit more palatable to the Rio investor base? I mean, all these are, you know, quite sort of open-ended questions, but um there'd be some huge fees on the line for the uh for the bankers on this merger. So, I'm sure they'll find a way to solve those problems um as best they can. >> Yeah. Yeah. Life-changing fees, I think, in this one. Um >> a couple of the other medals I'm I'm keen to to touch on, PGMs. They've really been working and it's it's a hard one for us here in Australia because there's just not that much exposure on on the ASX and that's part of the the charm if you like of of PGMs because it's South Africa, it's it's it's Russia, it's these parts of the world. >> Have have you played this in in any way and do you have a strong view on it? >> No, we haven't. I was I was getting closer and closer to just buying the physical um last year and I I didn't pull the trigger, which is, you know, one of many mistakes that we made. um >> pretty good year for for many mistakes I reckon. >> Oh yeah. Yeah. But I mean, you know, you can always be better and you should always, you know, go through and you know, work out what you know, why you didn't or or whatever to try and not avoid making that mistake again. Um but I think for for the P for the um the platinum group elements once again like similar to what our discussion about uh copper is that it it the move in price seems to be investorled rather than demandled. Um it I think probably had some uh quite tangible foundations in that um you know people came to the view that internal combustion engines are going to be around for a lot longer than you know what we might have thought three or four years ago and so that means the you know PGE demand for the catalytic converters is is going to be a bit more enduring and then you know okay so we need you know we're going to need this stuff for a bit longer and for a long time um you know platinum was trading you know well below the cost curve for some of those South African mines Um and then the investors have sort of piled on top of that thematic and and pushed prices um quite a long way. Um you know where did it end? I'm I'm not quite sure. You know picking sentiment or or second guessing sentiment can be quite difficult sometimes but you know that's my understanding of what's transpired to date. >> Yeah. Yeah. And and how about tin? This is one we do have a a small little view into here in Australia down in in Tazzay with with some rich history as well. But >> the tin market has been electric to the to start this year and there's um >> yeah there's a whole bunch of different reasons why there's lots happening in the in the small pockets that produce tin around the world and there seems to be a lot of attention on it. I think you've got a bit of exposure from from what I kind of know down in in in Tazzay but how are you thinking about it? Uh I mean this is one has a bit of a more sort of solid foundation to it to my think. I mean there's you know the demand through um electronics and data center build out is you know is quite tangible. Um it's difficult for investors to u move the tin price around because it's it's a you know it's not a particularly liquid market. It's hard for big financial flows to come and to come and go like you know like copper for example. Um and then on supply side like through you know Cambodia, Southeast Asia and India and sorry um uh Burma I think is the other >> um other countries you know had their supply disrupted. I mean >> you know that looks like it's going to be long you know long lasting. Um and I think there was another there was a um one of the larger tin mines just in on the border between DRC and um Uganda. Yeah, that's the one. >> So Alphman's mine in in the DRC. >> Yeah. Yeah, that's the one. And I mean that I think that knocked out something like 5% of global supply or something like that. So it's uh you know when you've got a tight market and all of a sudden somebody pinches you know knocks out 5% will buyers tend to start to get very nervous and and they will start building you know building inventory to protect themselves against further price rises. But you know that just leads to the price moving um anyway. So it's uh yeah it's a you know positive feedback loop that the metal's in at the moment. Yeah, a nice little project down in Tasmania seems seems a bit easier to manage than some of the more eclectic parts of the world. >> That's right. >> Yeah. So, aluminium is one of the other ones and this is a a whole supply chain. There's lots to it. There's the the bulk site players, aluminina, aluminium, but it's it's been kind of hot as well to to start the year. It's just had people talking about it and we've got a bit of insight into it in Australia with the various parts of the supply chain that we see in Australia. I know MMI was a company a couple years ago that we' we'd spoken about, but are you seeing pockets of value in in the uh in the chain? >> Yeah, definitely. And I think that it's um you know, the rally in copper price is probably sh thrown aluminium into sharper focus because there is a you know a substitution um uh trade there sort of at at the margins. but also the ratio of copper to aluminium um which usually sits around I think 3.7 to four times as has blown out as as copper has rallied. So you know that starts to look show aluminium as being cheap. But um again on a on a sort of a longer term view the the interesting story with aluminium is um is that you know for a long time or for the last decade uh your new aluminium um capacity has come from China um you know with with very cheap power because you know aluminium is basically just congealed um electricity uh whereas China's now has put a 45 million ton peranom cap on their capacity and they certainly appear appear to be sticking to that. Um, so begs the question, I mean, as demand grows, where is your spare, you know, or where where is your additional aluminium going to come from? And most people point to Indonesia and um, you know, the potential for them to do, you know, something similar as they've done with nickel with aluminium. that um Morgan Stanley uh shot up to Indonesia in in January and and their takeaways were that the the power generation is just not there to um really accelerate their aluminium production growth anytime in the next two to three years like it's it's going to take it take a while. Um so you know incremental supply from Indonesia but nothing much. But at the same time, you've seen um you know, South 32 shut down their smelter in Mosamb beek because of high power prices. Um an open question what's happens to the rest of or what's left of Australian aluminium production due to high power prices again um >> and problems at Brazil aluminia as well. >> Yeah. So it's it's really struggling and um you know again because the world's been reliant on China for so long for it it's it its refining um industry there we could end up in a world where you know aluminium prices need to move to such a point that you can produce it profitably at $130 $140 per megawatt hour whereas um I think the the Tomago refinery in New South Wales their power contracts that are about to roll off they're closer to $50 per megawatt hour. And um yes, I mean if if that if they're the sort of projects that need to be um sustained, well, the aluminium price is going to have to move quite a long way to sort of balance supply and demand. Um and just the last point on that and it it applies to copper and it definitely applies to aluminium is um as opposed to other um other much niche markets like lithium which is more or less about sorry 1.5 million ton market you can bring on decent chunks of supply. So if you know Wgina was to turn like the rest of their trains on I think you add you know maybe 5 to 7% of of global supply there pretty quickly um because it's a small market whereas with copper which is a 26 million ton peranom market or aluminium which I think is around about a 60 million ton peranom market it's much harder for the supply side to catch up and so you end up with a sort of an iron or scenario from the last commodity boom where you know you've got to build you know significant can infrastructure before that supply hits the market. And in Aluminium's case, you're going to have to build more power plants for that supply to um before that supply comes on. So that just means that the rally, you know, should last for for a while longer than um you know, then for some of these niche commodities. >> Yeah. You measure these things in years instead of instead of months. I got to say going to an aluminum plant is right up on the on the list. It's >> just the the amount of energy that goes into it. The the the process is is fascinating. And to your point on Indonesia, I mean you you made the um the sort of link with with nickel and what we saw there with Morowi and the other industrial parks. They they solved the energy problem. That that nickel process is not short of energy demands either and they just square off a big plot of land and fit it all in there. So you'd have to imagine that's something that just takes time to work out if they're serious about this. >> They can solve it. >> Yeah, definitely. Um yeah, I mean they've you bu building they can knock up coal power plants reasonably quickly um there. Although I suspect the like there has been some environmental um carnage you know in Indonesia recently. I think they had a few people that died um due to floods uh early um late last year, you know, which were tied to, you know, mining industry and and the palm oil industry as well, not you know, looking after their um or rehabilitating their land as as as um as uh as well as they should have. So, you know, it's not a complete free-for-all, but it still takes time and um you know, it's still you still need to secure the additional coal supply for those power plants. You know, that's becoming a little bit more difficult now. So, you know, again, it is certainly much more likely or so will happen. Like, I think definitely it's a matter of um when rather than if, but it's still, you know, a few years away at least, it seems. >> Yeah. Yeah. All right, Sammy, a couple a couple kind of general ones to to finish off. I'm I'm pretty curious to hear you you manage two different funds. One sort of targets the the smaller end of the market and the other the slightly larger end of the market. But how do you how do you think about these differently in this in this type of market when when everything's kind of working and what you what you're targeting, what you're avoiding and these sorts of things. I think as much as possible we we try and um we just try and do what we tell our investors we're going to do. So you know the larger fund that that um that myself and you and run uh is called the strategic natural resources trust like that is um been sold from inception as being a a lower beta way to enjoy commodities exposure and so you know we we don't take as as big a swings. We we were in um probably later stage um you know companies that have you know a fair way down the de-risisking path. Um and so you know the returns for that one um should be more reliable albeit you know we had a we had a decent year last year whereas the micro resources trust um which I run I mean that's uh um more you know feel the wind in your hair type thing. will take you know bigger swings. Um we'll go into earlier stage um investments and and you know that worked last year so we you know just ticked over 100% return for that one um and uh you know hopefully we do something similar again this year but the returns will be more volatile for that sort of product. U but we're we're candid about that and um you know some investors uh you know are happy to take that you know that risk and and hopefully the return that comes with it. Yeah, huge huge year last year and I can't believe we hadn't had you on the on the show with the amount of times we've had you on. Um I'm I'm curious to hear the the benchmark there right now because this is a for a lot of fund managers you've kind of touched on this but like gold for instance if we look at the ASX 300 I think it's like 20 20% of the >> it's getting up there >> the the market now. So, and and that's just gold. Like resources beyond that is at at another number of percent. I don't know what the exact number is, but if you're if you're one of those fundies that doesn't like to play in resources, you're you're between a rock and a hard place, aren't you? Oh, >> 100%. And um like last year, sorry, for calendar 25, the small resources index was up 70%. You know, that's that's crazy. Yeah, it was on an absolute tear. So if you um are sensitive to the um small odds index which are you know a large number of funds are um and you don't have any resources well it's going to really hurt uh and so you're um you're forced to cover that underweight. Now if you've got some resource investing experience then yeah great but if you don't well you're sort of groping around in in the dark there but you've got to solve that problem somehow. um because otherwise you're going to end up, you know, underneath your benchmark and you and you're not going to get paid. So um it just um all the outcome for that is that more money should be flowing into the space as um as time goes on. >> Yeah. And in a world in which the the ASX 10, ASX 20 are so richly valued like the banks, the com banks of the world at 25 times earnings, it becomes a real tough one for for the super funds, all these Aussie fund managers to kind of play. Yeah, it does. And I mean, I suppose the only frustration for, you know, people like me and the rest of the um commodity sort of fund managers that um that play our trade is that uh when you have these generalists coming into the space. I mean, it's great on the way in, but they don't like commodity investing is they they hate the space if to be frank and so you know, the moment that something wobbles or goes a little bit wrong like they sell and sell hard and and get out because they you know, >> they never wanted to be there. >> Exactly right. Exactly right. But um uh and that's fair that's fair enough, but it does make for a um an inefficient market where you know a small wrinkle can you know present as a buying opportunity I suppose um if you know the problem is not as great as as what a given share price reaction might imply. Um but you know that's what makes a market. So uh you know we take the other side of that reasonably regularly. >> Yeah. Yeah. Totally. Last one because I know you're a busy man and you've got to shoot Sammy but humanoid robots. I know you like to to see what the latest is and you you write about them fairly regularly and the advancements particularly in some of the Chinese ones has been >> pretty astounding. Now you can you can see a lot from a a YouTube promo video and maybe there's a bit more than meets the eye with with some of these but some of the stuff you do see is pretty pretty outstanding. So how do you think about this all when when are you thinking about buying your your first one? I I reckon by 2030 I suspect I'll probably have one in the house and I won't be alone. I certainly won't be a first adopter, but I might be a fast follower. >> How much do you think you'll be paying at that point in time? >> Well, um that uh Unit Tree, the humanoid robot from Unit Tree, which is sort of the price I've been tracking of the, you know, of all of them for for a while now, that's down to $13,500 um per unit. >> Is that is that US? Yeah, that's US. >> US. Yeah. >> Um, but for context, in September 2024, when I first looked at that, that same unit was 90,000 US. >> Um, so, you know, it's fallen in price by what circa 80% in a, you know, say a year and a half at while the functionality of these things has been getting better and better and better. >> That's like a like the solar chart that just got cheaper and cheaper and cheaper, except this sounds a lot more complex than a than a PV. >> Yeah. And I think the challenge for the functionality of them is that you know unlike the um large language models that all chat GPT and all that stuff um use for learning and training um the internet's just full of text and speech etc. So to learn to learn the language is um there's a massive data set there. The same data set doesn't exist for how humans move around the home, how you sort of open a a washing machine and fill it full of clothes, how you fold a shirt and all this sort of stuff. So these training models need to be built from scratch. Um and that is that's probably the the rate determining step for the adoption of these robots is and and how competent they become around the house. But um it will be it will be uh solved and whoever solves it first is going to be able to roll it into their robots and then put them into um you know envir various environments industrial as well as residential and that will accelerate the learning even more so as as that feedback mechanism starts to um starts to uh sort of roll. Um, and then, you know, the the the functionality of these things should go, you know, exponential. And if you really want to get hyperbolic about it, you can, you know, go down Elon's sort of rabbit hole where he reckons that, you know, there won't be any surgeons in whatever it is five or 10 years time because the robots will learn to do that job um so quickly and and and better than humans can. So, you know, he's obviously talking his own book, but it's it's not, you know, it's not um completely beyond the realms of of possibility that something like that could happen. >> And in 2030, will you be will will the average person in Perth be jumping into an an Uber, a DD or whatever that is, driverless? >> I think the technology will definitely be there. I think in a uh in Perth and and Australia in general, it's regulation which holds these things back. I mean, clearly you can already jump into driverless cabs in, you know, many cities in the US. You can't do it here yet, but it's coming for sure. >> All right, as always, fantastic to chat, Sammy. Thanks for making the time for us, and I'm sure the uh the listeners have taken a whole bunch from your your views as always. >> Absolute pleasure, Jay. Anytime. Always enjoy a chat with you guys. >> And a massive thank you to our awesome partners. We hadn't had the privilege of thanking these guys in a little while, but Sanvic ground support who we had in the show, Exceed Capital, Intral Links, and check out the focus platform by Market Tech. Hudoo, money miners. >> Huduru. Now remember, I'm an idiot. JD is an idiot. If you thought any of this was anything other than entertainment, you're an idiot and you need to read our disclaimer.
The Opportunity in Commodities (Sam Berridge)
Summary
Transcript
I mean, I suppose the only frustration for, you know, people like me when you have these generalists coming into the space. I mean, it's great on the way in, but they don't like commodity investing is they they hate the space. And so, you know, the moment that something wobbles or goes a little bit wrong, like they sell and sell hard and get out because they they never wanted to be there. >> Exactly right. Exactly right. >> All right, money miners. We are a man and a half down with Trav being a good son supporting his mother up in Singapore for her birthday. But we have Sammy Barish to more than make up for it. Sammy, what a start to the year it's been. First two weeks. >> Ah, it's um it was it's enough to drag you away from the ashes. You know, the fifth test um like the headlines, you know, the first couple of weeks, you just want didn't know what was going to happen next. Um between Iran and gold going through the roof and then now Trump wants uh Greenland and then you throw some, you know, threatened criminal charges at the chairman and the Fed all mixed up together. It's um yeah been a pretty good start for uh hard assets like commodities. >> Yeah. Yeah, it has. And to to put it in a bit more context, I mean your your returns last year were outstanding across the the two funds that you kind of manage. So it's not as if we're in the um in you know that the very bottom and seen a kind of bounce out of nothing. A lot of funies in the um the natural resources space had had pretty decent 2025s, but it's a real continuation of the theme, right? >> Yeah, it is. it it's um you know de like the December quarter uh last year was quite strong for the entire sector um and yeah it's a lot of those themes um just keeping on going whereas um I suppose the one observation in January is that because the sector has moved so hard and so fast uh it's capturing capturing the attention of of generalists and investment advisers and and various other asset allocators who are underweight the space and that underweight is hurting their relative returns and so you know the level of inquiry um you know just in January for you know getting more money or putting money to work in the space has been quite acute so um you know that can lead to a bit of frothiness so it's you know can be a double-edged sword but still that's what's happening at the moment >> how far along in that process do you think we are >> I think pretty early stage um there was some uh interesting um uh sort of recommendations coming out in December about uh you big banks advising their you know high net worth clients that they should add you know another percent or or so to their um to gold for example as part of their their asset allocation and and across you know Europe and the US like what that means in terms of gold demand is is quite staggering. So um you know if people are looking to uh you know primarily gold but also secondarily the other commodities as alternative stores of value to you know fiat currency well that process is um in it is in its infancy. Um and again it can lead to frothiness but um I think we're you know we're closer to the beginning than the end of of that process. Yeah, you see a lot of top investors around the world talking about a 60 2020 20 types of portfolios where the allocation to gold is is unlike anything we've seen in the last 100 years, but it still seems as if we're pretty far away from that actually happening. >> Yeah. I mean, again, you know, these people aren't idiots. They don't want to be buying the top. So, you know, if prices start running away uh too quickly, um I suspect they'll hold back. But that that latent demand, I think, is still there. So, you know, you'll end up with um higher lows and higher highs as dips um continue to be bought, you know, until some point that the macro changes. But um yeah, I don't think it's changing u you know, materially anytime soon. >> So, when you when you think about this period in history and and what commodities are doing, what what other period do you do you reflect most on? And I know the the 70s is is one you've spoken about, but what what sort of matches and what doesn't match with with that era? >> Yeah, it's a it's a it's a good point and you know, everybody wants to sort of find the analogy to give them themselves a little bit more um conviction in in forecasting what's going to happen next. And I think the the environment we are now is certainly um has stronger similarities with the 70s than the last commodity boom um which was obviously China demandled. Whereas in the 70s, you know, there was a um an energy crisis, a shortage of oil um that was uh you know, geopolitically um led um and that that you know was very inflationary and that that flowed into um into a lot of other hard assets around the world. So you know today um we've got China and and the US competing over you know various metals. Um you know certainly the the US has built up huge inventories of copper over the last 12 months. Um they're discussing you know building strategic reserves of of rare earths and um I think there'll be more metals added to that. So they're the echoes that we get. It's more a um a sort of a restriction of flow of commodities around that's driving prices as opposed to a a traditional sort of demandled deficit. Um that said, I mean going into 2026, I mean demand does look a little bit better than it did in 2025. So that's helpful. But that sort of deglobalization trade and and you know restocking event um by countries around the world as they look to secure their own commodities, that's really something to watch um to determine sort of the trajectory of metals prices on the way forward. >> Yeah. When when we think about how wild the the past year and the past couple weeks have been, the the 70s are a really interesting example because oil jumps about four times in in one year, I think, in 1973. Over the decade, gold, I think, was up 20x from being pegged. Silver goes from like eight bucks to to to 50 bucks. So, these are these are crazy movements in the in the metals. >> Yeah. And it's and then you think, well, you know, what what brought that bull market to an end? because it went, you know, more or less for eight years. I mean, there were some spikes along the way and it ended when, um, I think Paul Vulker um, you know, took up chairmanship of the Fed and then he hiked interest rates something like 20% to combat inflation and that snuffed out the market and and that was that. Whereas today, with the amount of debt sloshing around the world, if any Fed chairman tried to do anything like that, like it would cause massive massive issues. So, you know, pulling that interest rate lever is is going to be much more difficult and and obviously, you know, Trump's um railing hard against uh against any suggestion that that could take place. Um so, it's it's not clear what's going to bring sort of this sort of scenario um to an end. I mean, you know, commodity prices go high enough, you end up with um you know, supply, sorry, price induced demand destruction, like people just can't afford to use the the commodities for um for all applications. So that brings um demand down a little bit, but uh again, you know, we're I think we're at the more much closer to the beginning of this this um you know, rally than than the end. >> Yeah. Yeah. Well, love him or loathe him, Elon Musk was tweeting, I think the other day that the silver rally is not good given the the kind of industries he works in as well, how much silver is used as as one of the top conductors in in the world and humanoids and anything else they want to build battery related. So there's very real kind of consequences on on that kind of front. If if we look to to Asia kind of getting a bit closer to home from from the US now it's interesting to see some of the data and you flagged some of the PMI data which in in simple terms I think people can think of as a lead indicator potentially on on metals demand, commodities demand. What are you sort of sniffing out from there? Uh I think it's we're finally starting to see a bit of um traction of the stimulus efforts um over 2025 sort of flow into the the real um you know the real world and and that's reflected in those PMI numbers um for for Asia. So for for much of 25 um you know you had the big sort of uh you know hissyfit over Trump's imposition of tariffs in April. Um you know that did impact the US demand. it did impact Chinese um demand for commodities. Um the Chinese uh were very selective in how they chose to stimulate their economy to just try and keep things on an even keel. You know, more focused on consumer electronics, EVs, um manufacturing basically. Uh and bit by bit that stimulus appears to have been um you know effective now and and we're starting to see PMIs turn positive. But the other um factor which is you know different from the last commodities boom is that the delta in Chinese demand seems to be flowing through their exports. So it's basically rest of world demand as you know as expressed through Chinese exports which uh is the area that's surprising to the upside. So you know this commodities rally at the moment feels much more broad-based from a demand point of view than you know the very China ccentric uh rally that we had through the 2000s which is which is interesting. >> Yeah. Yeah. I mean steel steel is what comes to my mind like the the the amount that China is exporting in steel has a bunch of ramifications but firstly it tells you what the demand overseas is like >> and and secondly what it's doing to any other domestic steel making blue scope here in Australia for the bits that they do >> produce here and the the Europeans just begging for for tariff and subsidy type protection for their their industry where where does that kind of go like it. I don't think you're too far off the mark in thinking that part of this is is deliberate from from the Chinese and how they think about it. Or is it all just property market collapsing? >> Uh I think I think it's a bit of a bit of both. Like the you know the Chinese construction and property markets been you know has been horrible for years now. It's not doesn't look like it's going to get any help either. Um but at the same time like you've had legit growth through you know Vietnam, Indonesia um you know the Azian nations in general and you know they they do have you know they they're drawing more um more steel into those countries and so um you know I think it's it's just you know the that sort of population base which when you include India is actually much bigger than China um you know they've their growth has been quite rapid for a long time But finally it's starting to compound off a off a reasonable base and is and is moving the needle a little bit more. But um just on the steel exports uh there was a very interesting headline in J uh I think it was yeah first week of January around China requiring um any steel exports to get sort of you know federal government approval before you know before they're um they're allowed to export steel out of the country. Now, um that's been, you know, sort of a rubber stamping effort to date. But as the world becomes more reliant on China for steel because their exports are a bigger part of of um rest of world demand, uh if they were to slam the brakes on those steel exports, it would, you know, it would be ruinous for, you know, construction costs around the world because, you know, the China exports is having such a big influence on setting the price. And we can see, you know, the amount of leverage they have in the rare earth market. you know there is potential for something similar in steel and possibly in aluminium. So you know this weaponization of commodities um could spread and not to say it will but you know the the mechanisms are there for it to do so. So on on the back of that has has your thinking I mean I remember having you in this room and about six months ago we we were speaking about the um all the checks that our government had been writing to traffic ura as the glen cause of the world here in Australia for their downstream metals processing mainly in the base metal space >> and that has all come off the back of the the weaponization of of this and it's always a bit murky because then you're giving money to traffic or glen cause not exactly a a standup Australian producer, but you've if if you are of the view that you need to have some sort of industry and they're the only ones left, what do you kind of do? So, has your thinking on that changed at all? >> No. No. And I think if anything um it's uh probably a subset of that um speech by the Canadian um PM Mark Carney which has you know gone sort of viral over the last couple of days saying you know it's a we're seeing a change in the you know the the world order and you know all these grandiose armwaving statements. that, you know, if globalization does start to reverse and you can no longer rely um on the free flow of commodities and goods around the world and so we go back to an environment where, you know, countries have to be, you know, to a much greater extent self-sufficient, that's massively inflationary for um for metals prices because we can't compete with um you know, the refining costs, not the mining, like we do mining reasonably well, but the refining costs we we just can't compete with because our power prices are too high and going higher. So, um yeah, I think that uh theme if anything is strengthening. >> So, do we just have to be smarter with with who we pick as partners? >> Yeah, definitely. And I think um I you know I think uh you need to be realistic about the value of these industries because um I think it was one of the economists uh Saul um Kavonic I think his name is um you know came out the other day said oh you know manufacturing jobs aren't any more important than any other jobs and on a superficial level he is right I mean it's it's just dollars and cents however the um the benefits or the fringe benefits that you get from a big manufacturing industry um you know do help lower prices or do facilitate other activities in the economy and for example um take uh the umaring power station in in New South Wales produces I think maybe no a bit more than that maybe 20% of New South Wales power like that was built sort of handin glove with their um uh with the Tomago aluminium refinery so it produces power at a very low price and yes it supports that refinery going into production and making money, but it also supports cheap power prices for the rest of the for the rest of New South Wales and and um for a very long time like that sort of um symbio symbiosis helped um uh Australia become a very low power and power country and and that helps our manufacturing. So you know if that manufacturing dies then also the demand for those big base load um power generation also dies but that means we end up with you know higher power costs um uh you know flowing through the rest of the economy which is a you know a bad thing. >> Yeah. Okay. If we if we change t now there's a bunch of metals a lot of them are breaking through alltime higher semi. So I want to go through them because >> not all the the the reasons are are alike. Some of them are performing strongly for for quite varying reasons. So copper, I want to start with what what are you making of this incredible rally we're seeing there and and what's got us to this point? >> Um well, yeah, I think as as touched on earlier like that the big in big stockpiling by the US um of copper has been a a major driver of the of the rally um to date. In copper inventories around the world have actually been increasing while the price has been increasing. So that's a bit counterintuitive. Um I think the prices are where they are. um because there's a little bit of uh concern in the copper market that those inventories that are within the US won't be allowed to flow back out to the rest of the world should the um uh um sort of LME price rise above the comx price which would then incentivize the flow of copper out of the US. Now if that doesn't happen um yeah it throws back to what we were just just discussing and that you know countries are it's sort of each country for themselves but um you know I think that is a bit of a risk to the downside um for I mean if assuming the sorry assuming the copper does flow out that's a risk to the downside of those prices but I think at $6 you're also going to see it $6 a pound that is um see an increase in scrap supply. So I I reckon copper is looking pretty full um up here. Um where it pulls back to I'm not sure. I think it probably remains quite elevated because you know whilst there has been a a big inventory build last year and you know maybe that's got a little bit of ahead of itself you know looking into 27 28 29 like that structural deficit is is well and truly there. So, you know, that's uh you know, probably a little bit weary, but in the short term, but longer term, um you know, things still look pretty good. >> Yeah. Yeah. Two two follow-ups. Um the first one, and I have almost no experience in this, so I'm curious to to hear what you think, but I've heard with the the inventories that over the past 20 years, there's been a real change in in where the inventories are held. So, it's much harder these days to actually summize what the global state of inventories is. Is this off base or does that sound broadly right? >> Uh I think it is it is difficult but there is also um you know with a big re big liquid market like copper it is worth the while of the various sort of um commodity consultants and banks and analysts etc to you know try and put some numbers to that as best they can. So I, you know, I' I'd be surprised if um that there's any, you know, if there if the rounding errors in these numbers um undermine the you know, the premise that inventories actually have increased >> um a bit around the world. But uh yeah, I mean that remains to be seen. >> Yeah. And and the second um follow-up is TCRC's. They've been a a huge gift to the copper miners that that we know here. I mean, given given their money as opposed to the other way round, how long does that continue? >> I think for a while. I mean, the shortage of copper concentrate um doesn't look like it's going away. Um unless you start to see refineries shut down and sort of, you know, reduce that supply demand um mismatch, you know, by shutting refineries and then that should allow the balance of them to um get some more pricing power in terms of their TCRC negotiations. Um certainly, you know, I don't think any anyone's building any more copper refineries anytime soon. So, um I mean it should, you know, slowly correct itself, but I don't think it's going to be a near-term event. It will take time for the the copper concentrate supply to bit by bit, you know, move in excess of of smelting capacity and and at some and at that point, you start to see a normalization of TCRC's. >> Yeah. Yeah. And at this point in the cycle, are there preferred ways for you to to play the copper? Do you do you like some of the juniors at the moment? Are you safe in some of the producers? Or do you think like copper is such a richly valued place to be at the moment? >> Uh it's a good question. I mean, you know, if a commodity price falls, you know, doesn't really matter what your exposure is. I mean, everything, you know, falls a reasonable amount um regardless of sort of, you know, where it's trading for for fair value. But um I think that the you know the the top tier um or the you know better quality development stories are probably where the value um exists in the market today. So you know the developers never really price in spot um at all. So there certainly there's discounts to to spot available there. Um and you know because of the shortage of you know large and when I say large I mean sort of 50,000 ton and above uh copper projects in desirable jurisdictions I think if uh you know any development story that falls into that basket is is an M&A candidate and so that's you know probably where we'd prefer to look. >> Do you do you spend much time looking at the overseas names? >> Yeah. Yeah. Yeah, I mean there's there's not much left of a of a copper industry in uh in Australia due to all all the M&A and you know Sandfires um you know sits there as as being pretty richly priced as a result and you know a long way below that there is a sort of a growing group of um of of smaller producers trying to get up and running and you know they they've have you know had various struggles over the years because they've been higher cost but yeah their margins would be looking much better now. Um so you know there might be some um uh some opportunities there but you know you just always need to balance that risk and reward um with those guys. >> All right, next commodity uranium. Uranium has been on an upward trend again and everyone is bullish in in the space again. >> Interestingly sput has been buying quite a bit again. So I think >> they're at over 70 million pounds locked up in the in the vaults there never to be seen again. So yeah, interesting dynamics with the the term and and the spot pricing that we're seeing. A lot of the um the miners once again are being priced very very kind of richly. So what do you make of the whole space? >> Um I think uranium is um or is enjoying some tailwinds as being a bit of a proxy to the the AI um data center buildout and the power requirements um that that will that needs. And so every time, you know, the all the big tech stocks in the US have a bit of a sell-off, well, you know, the uranium stocks usually go with it. So that's annoying and it doesn't have anything to do with the fundamental supply demand story. It's just something to be aware of as as noise. Um, you're going to have the uranium market has to contend with. But, um, I think that, you know, it doesn't make any sense for the spot price to be below the term price. you know, if the term market's where all the volume is, you know, why wouldn't you go and soak up pounds in the spot market until, you know, until such a point you get to the to the term price. So, I think that's um you know, that's probably the first move that we're going to see. And certainly the um the split um sorry, the spot ETF uh uh buying will help that happen. But beyond that um yeah I mean it's you know the the deficits you know are looming and um you know those reactors or these new reactors uh you know do need to start contracting you know a long time ahead when they're actually starting to commission and you know there still a few years away but I suppose a sort shorter term you know these Japanese um reactors continuing to restart and and um other existing reactors around the world all prolonging their life um is probably where the you know the incremental sort of fundamental demand is coming from. Um but still today like I mean we saw with Paladin's quarterly report um just a couple of days ago like even at $85 a pound and and yeah sure the achieve Paladin's achieve price was a bit below that they're still not making any money. So you know for big waves of new supply to come on you know the price doesn't appear to be high enough just yet. Yeah, it's remarkable how many all-in sustainings or all-in costs we can see at half the realized cost yet money doesn't drop to the bottom line. And on the on the macro, it was interesting to see MZ, the the leader of Germany, the chancellor, acknowledge finally that it was a mistake to turn off the um the uh reactors. So, a bit more of that rhetoric around the world, I think, will will be seen. >> Yeah, definitely. I mean it was nice that he finally came out and said so but um yeah it was an absolute disaster both for Germany and the environment as well but um anyway Greenpeace can go pat themselves on the back because they were championing championing that um initiative for years. One more question on the the uranium discussion more broadly is the US view. So they've been quite strategic in how they've gone about certain projects certain metals rare earths last year for instance. Do you see them doing something similar in the uranium space picking a national champion? >> I think it's I think it's quite possible. Um certainly, you know, in the when you go through the list of metals the US seems most concerned about they've already underwritten the price for rare earths, I think uranium's quite high up there on the list. And so >> 20% of their their electricity. It's huge. >> Yeah. And and obviously um the demand for you know more and more and more power generation. I mean Trump just wants to saturate the country with as much uh generation as he can to as a means of of stimulating um uh you know GDP growth. So yeah, I it's it's very difficult to sort of forecast, you know, what that what shape that might take, but underwriting an increase in domestic uranium production in the US, I think, is uh, you know, is a sensible bet. Like um I, you know, I I just wouldn't be surprised if they do it. And I think there's maybe a little bit of expectation in prices that that's going to take place, but yeah, you know, we wait and see. But, uh, I think that makes a lot of sense. Are there are there any names in the uranium space you you're holding at the moment you think are still quite cheap or you more likely to trim in this kind of environment? >> Uh it's all I mean I think most of the you know the more liquid names with the exception of you know things like Camo which trade at a big premium to the rest of the market are pricing in more or less spot. Um but a lot of people as a lot of the sort of the um the the brokers and banks don't have forecasts going material materially above where we are at the moment. So that's where the opportunity is. I mean if you take a view that you know uranium is going to go to 150 well you know things look cheap. Um but you know that requires you stepping away from consensus by by a fair degree. So, um I think there's there's still more to play out in terms of what the US is going to do and what that will mean for prices and that's probably keeping you know keeping our holdings as is um for the for the near term but um yeah if any of that changes well you know we'll change our mind. >> Money miners I know we've said it many times now but this year has been a cracking start and last year was just fantastic as well. So you might be thinking it's time to diversify. I know Trav and I spoke about this late last year and we might be getting closer to that time and if you are thinking about that, Exceed Capital is a name you should think about. Exceeded Capital is a commercial property group out of Brizzy, Queensland, and they have been in the game a long time. Now, they've got alignment, something we at Money and Mine love. They are aligned with their unit holders by investing in every single one of the property trusts they put forward to you. Now, they've got a brand new property trust that I want to tell you about, the SP property trust. This is an A-grade office building in the Gold Coast in the mighty state of Queensland. They're targeting 8% peranom cash returns over a 5-year time horizon and they're going to be paying out distributions monthly. If this is something you're keen on and you want to find out more, get into the show notes and click on Exceed Capital. Massive thank you to Exceed Capital for backing money of mine. Now, back to Sammy. Okay, next up, gold. We might be one or two sleeps away from gold breaking through 5,000 US bucks, which >> is barely believable. Even saying the word sounds kind of funny. >> How do you how do you sort of take into account everything we've kind of seen like this latest kick up from sort of 4,400 where it kind of consolidated for for a while has been pretty electrifying again on the back of >> geopolitics and the like. So, how are you sort of chewing it all up and and digesting this? >> Yeah, it's it's really it's really difficult. um as a as a manager to try and um you know you know manage your your exposures to this um appropriately because on the one hand we I mean we do have a big gold exposure and you know that becomes bigger as your your gold holdings um you know rally and I think undoubtedly we've had a confluence of quite positive events for gold over um over the last oh sorry the first couple of weeks of the year and so that's probably added a little bit of froth to, you know, over and above the the underlying um support for gold, which is, you know, a bit of skepticism that around the the value of US dollar and dollars and and just government debt levels globally. Um but every time anyone sold, you know, their gold exposures over the last 18 months, two years, it's been the wrong thing to do. So um you know I I must admit like the meltup in price we've had over the last um couple of weeks does feel a bit like October last year um after which you know things got a bit overbought. There were stories about you know people lining up in Martin Place to buy physical gold and you know sure enough the price rolled over by you know a couple hundred bucks an ounce um straight after that but here we are back at alltime highs um and the drivers I think for a higher gold price still remain very much in place. So yeah, I mean we just again, you know, anything that's uh looking a little bit frothy or we we see, you know, or foresee um risks to production and downgrades, we you know, probably be trimming those um as uh as as you know, where we see that that opportunity. But, you know, I think the value in the gold market at the moment still sits with the the developers. Um and that's because I think a lot of um a lot of people in the market are sort of slow to you know run numbers to what you know what a development proposition might be worth and um you know I've did this recently the you know you take your generic you know 100,000 ounce producer or sorry yeah 100,000 100,000 ounce peranom project so you need about a million ounces in reserve or um to to achieve that you know I assume $300 million for for cap AEX and um you know even a pretty conservative cost of about 3,000 bucks an ounce. Well, you're going to end up with a MPV for that project of 1.4 1.5 billion. You but that's not what these development projects are being valued at as it's nowhere nowhere near it. So, you know, even if the B gold price was to pull back, you know, a couple hundred bucks an ounce, um I think these um you know, projects that look like they're able to be permitted, you know, no fatal flaws, um they will uh you know, endure in terms of their share price and and you know, should um continue to outperform on the upside even, you know, even in a bit of a pullback. >> And you expecting some of the producers to to jump on these opportunities? >> Yeah, definitely. I mean, this one of the reasons that I suppose generalist investors hate commodities is because it's an industry of depleting assets and modeling that is is difficult is different to modeling an industrial company and >> it just doesn't look as good when you don't have the terminal value that just goes on. >> Yeah. You know, you got to replace your resources and reserves. Um, but for producing companies, that's becoming cheaper and cheaper. I mean, the margins of of some of these gold companies now start starting to look like software companies. is I mean on the back of the envelope um I had looking at Capricorn which you know one of the lower cost producers like their eB margins are like you know high7s you know possibly touching 80% today with a spot price move I mean that's that's like a software company but um so the capex hurdle to replace those reserves because capex and costs aren't going up anywhere near as much as the gold price is you know it's becoming smaller and smaller and so that lends itself to um to M&A um if they don't you know have the resources themselves. >> And interestingly with with the Capricorn example, they've been very disciplined about not recutting the the or body and and changing the assumptions going into that. Do you think we've seen sort of discipline across the board from the from the producers there? >> Yeah, I think to um to the extent possible, I think you have. Um I still feel that um throughout the mining industry in general like the scars of um the last commodity boom are still present and the memory is still there where you know people just let costs run you know uh unchecked because you know revenue line the revenue line was growing so much whereas this time round by and large I think cost discipline is much better um and margins are you know they are increasing whereas is you know in in previous cycles you sort of saw you know the you know 90th percentile of costs almost tracked the commodity price or or the gold price specifically you know almost in parallel whereas re more recently gold price you know has gone sort of exponential and costs are are reasonably stable at the moment so um you know those margins uh are increasing and you know to your point that that cost control is much better >> yeah you said scars of the last boom and I couldn't help but think of Rio Tinto And I haven't actually spoken um on the show about Rio and and Glen Coror because it's it's just such a big deal and it's it's hard for a lot of people and it's not that meaningful for a lot of people at the smaller end of the market to have a strong view on this one way or another. But are there sort of ramifications of this type of deal or are there um little caveats to it that you think are kind of interesting for for investors or or speculators to kind of think about? Yeah, I think probably the the one factor that will jump to um particularly institutional investors minds uh very quickly is what the index ramifications are for such a merger. Um because if you know BHP's waiting in the you know all the ASX 200 I suppose is is monstrous and so it demands attention for people who are benchmarked against that index. if something similar was, you know, if Rio and Glenor were to get together, you're gonna end up with a similar scenario because there would be a bigger company than um than BHP. So, um you know, that's certainly one one part of it, but um from an operational point of view, I suspect the cultures are quite different between the two. Um I mean you know Rio's got um you know has a has a finger in the pie in sort of in terms of African developments via Sim do you know how they go operating in the in the DRC with Glenor's copper mines there um is a bit of an open question. I mean Glenor seems to do okay but it is it is tough >> very hard to see Rio operate in the DRC. Yeah, I I'm not sure I'm not sure how, you know, their very sort of straight laced approach is going to going to work in um in that country uh on a number of fronts, but um and then there's another question of what happens to the coal assets that Glenor's got. You know, do they get spun out as a sort of a you know u spin co to try and clean up Glenor to make it a little bit more palatable to the Rio investor base? I mean, all these are, you know, quite sort of open-ended questions, but um there'd be some huge fees on the line for the uh for the bankers on this merger. So, I'm sure they'll find a way to solve those problems um as best they can. >> Yeah. Yeah. Life-changing fees, I think, in this one. Um >> a couple of the other medals I'm I'm keen to to touch on, PGMs. They've really been working and it's it's a hard one for us here in Australia because there's just not that much exposure on on the ASX and that's part of the the charm if you like of of PGMs because it's South Africa, it's it's it's Russia, it's these parts of the world. >> Have have you played this in in any way and do you have a strong view on it? >> No, we haven't. I was I was getting closer and closer to just buying the physical um last year and I I didn't pull the trigger, which is, you know, one of many mistakes that we made. um >> pretty good year for for many mistakes I reckon. >> Oh yeah. Yeah. But I mean, you know, you can always be better and you should always, you know, go through and you know, work out what you know, why you didn't or or whatever to try and not avoid making that mistake again. Um but I think for for the P for the um the platinum group elements once again like similar to what our discussion about uh copper is that it it the move in price seems to be investorled rather than demandled. Um it I think probably had some uh quite tangible foundations in that um you know people came to the view that internal combustion engines are going to be around for a lot longer than you know what we might have thought three or four years ago and so that means the you know PGE demand for the catalytic converters is is going to be a bit more enduring and then you know okay so we need you know we're going to need this stuff for a bit longer and for a long time um you know platinum was trading you know well below the cost curve for some of those South African mines Um and then the investors have sort of piled on top of that thematic and and pushed prices um quite a long way. Um you know where did it end? I'm I'm not quite sure. You know picking sentiment or or second guessing sentiment can be quite difficult sometimes but you know that's my understanding of what's transpired to date. >> Yeah. Yeah. And and how about tin? This is one we do have a a small little view into here in Australia down in in Tazzay with with some rich history as well. But >> the tin market has been electric to the to start this year and there's um >> yeah there's a whole bunch of different reasons why there's lots happening in the in the small pockets that produce tin around the world and there seems to be a lot of attention on it. I think you've got a bit of exposure from from what I kind of know down in in in Tazzay but how are you thinking about it? Uh I mean this is one has a bit of a more sort of solid foundation to it to my think. I mean there's you know the demand through um electronics and data center build out is you know is quite tangible. Um it's difficult for investors to u move the tin price around because it's it's a you know it's not a particularly liquid market. It's hard for big financial flows to come and to come and go like you know like copper for example. Um and then on supply side like through you know Cambodia, Southeast Asia and India and sorry um uh Burma I think is the other >> um other countries you know had their supply disrupted. I mean >> you know that looks like it's going to be long you know long lasting. Um and I think there was another there was a um one of the larger tin mines just in on the border between DRC and um Uganda. Yeah, that's the one. >> So Alphman's mine in in the DRC. >> Yeah. Yeah, that's the one. And I mean that I think that knocked out something like 5% of global supply or something like that. So it's uh you know when you've got a tight market and all of a sudden somebody pinches you know knocks out 5% will buyers tend to start to get very nervous and and they will start building you know building inventory to protect themselves against further price rises. But you know that just leads to the price moving um anyway. So it's uh yeah it's a you know positive feedback loop that the metal's in at the moment. Yeah, a nice little project down in Tasmania seems seems a bit easier to manage than some of the more eclectic parts of the world. >> That's right. >> Yeah. So, aluminium is one of the other ones and this is a a whole supply chain. There's lots to it. There's the the bulk site players, aluminina, aluminium, but it's it's been kind of hot as well to to start the year. It's just had people talking about it and we've got a bit of insight into it in Australia with the various parts of the supply chain that we see in Australia. I know MMI was a company a couple years ago that we' we'd spoken about, but are you seeing pockets of value in in the uh in the chain? >> Yeah, definitely. And I think that it's um you know, the rally in copper price is probably sh thrown aluminium into sharper focus because there is a you know a substitution um uh trade there sort of at at the margins. but also the ratio of copper to aluminium um which usually sits around I think 3.7 to four times as has blown out as as copper has rallied. So you know that starts to look show aluminium as being cheap. But um again on a on a sort of a longer term view the the interesting story with aluminium is um is that you know for a long time or for the last decade uh your new aluminium um capacity has come from China um you know with with very cheap power because you know aluminium is basically just congealed um electricity uh whereas China's now has put a 45 million ton peranom cap on their capacity and they certainly appear appear to be sticking to that. Um, so begs the question, I mean, as demand grows, where is your spare, you know, or where where is your additional aluminium going to come from? And most people point to Indonesia and um, you know, the potential for them to do, you know, something similar as they've done with nickel with aluminium. that um Morgan Stanley uh shot up to Indonesia in in January and and their takeaways were that the the power generation is just not there to um really accelerate their aluminium production growth anytime in the next two to three years like it's it's going to take it take a while. Um so you know incremental supply from Indonesia but nothing much. But at the same time, you've seen um you know, South 32 shut down their smelter in Mosamb beek because of high power prices. Um an open question what's happens to the rest of or what's left of Australian aluminium production due to high power prices again um >> and problems at Brazil aluminia as well. >> Yeah. So it's it's really struggling and um you know again because the world's been reliant on China for so long for it it's it its refining um industry there we could end up in a world where you know aluminium prices need to move to such a point that you can produce it profitably at $130 $140 per megawatt hour whereas um I think the the Tomago refinery in New South Wales their power contracts that are about to roll off they're closer to $50 per megawatt hour. And um yes, I mean if if that if they're the sort of projects that need to be um sustained, well, the aluminium price is going to have to move quite a long way to sort of balance supply and demand. Um and just the last point on that and it it applies to copper and it definitely applies to aluminium is um as opposed to other um other much niche markets like lithium which is more or less about sorry 1.5 million ton market you can bring on decent chunks of supply. So if you know Wgina was to turn like the rest of their trains on I think you add you know maybe 5 to 7% of of global supply there pretty quickly um because it's a small market whereas with copper which is a 26 million ton peranom market or aluminium which I think is around about a 60 million ton peranom market it's much harder for the supply side to catch up and so you end up with a sort of an iron or scenario from the last commodity boom where you know you've got to build you know significant can infrastructure before that supply hits the market. And in Aluminium's case, you're going to have to build more power plants for that supply to um before that supply comes on. So that just means that the rally, you know, should last for for a while longer than um you know, then for some of these niche commodities. >> Yeah. You measure these things in years instead of instead of months. I got to say going to an aluminum plant is right up on the on the list. It's >> just the the amount of energy that goes into it. The the the process is is fascinating. And to your point on Indonesia, I mean you you made the um the sort of link with with nickel and what we saw there with Morowi and the other industrial parks. They they solved the energy problem. That that nickel process is not short of energy demands either and they just square off a big plot of land and fit it all in there. So you'd have to imagine that's something that just takes time to work out if they're serious about this. >> They can solve it. >> Yeah, definitely. Um yeah, I mean they've you bu building they can knock up coal power plants reasonably quickly um there. Although I suspect the like there has been some environmental um carnage you know in Indonesia recently. I think they had a few people that died um due to floods uh early um late last year, you know, which were tied to, you know, mining industry and and the palm oil industry as well, not you know, looking after their um or rehabilitating their land as as as um as uh as well as they should have. So, you know, it's not a complete free-for-all, but it still takes time and um you know, it's still you still need to secure the additional coal supply for those power plants. You know, that's becoming a little bit more difficult now. So, you know, again, it is certainly much more likely or so will happen. Like, I think definitely it's a matter of um when rather than if, but it's still, you know, a few years away at least, it seems. >> Yeah. Yeah. All right, Sammy, a couple a couple kind of general ones to to finish off. I'm I'm pretty curious to hear you you manage two different funds. One sort of targets the the smaller end of the market and the other the slightly larger end of the market. But how do you how do you think about these differently in this in this type of market when when everything's kind of working and what you what you're targeting, what you're avoiding and these sorts of things. I think as much as possible we we try and um we just try and do what we tell our investors we're going to do. So you know the larger fund that that um that myself and you and run uh is called the strategic natural resources trust like that is um been sold from inception as being a a lower beta way to enjoy commodities exposure and so you know we we don't take as as big a swings. We we were in um probably later stage um you know companies that have you know a fair way down the de-risisking path. Um and so you know the returns for that one um should be more reliable albeit you know we had a we had a decent year last year whereas the micro resources trust um which I run I mean that's uh um more you know feel the wind in your hair type thing. will take you know bigger swings. Um we'll go into earlier stage um investments and and you know that worked last year so we you know just ticked over 100% return for that one um and uh you know hopefully we do something similar again this year but the returns will be more volatile for that sort of product. U but we're we're candid about that and um you know some investors uh you know are happy to take that you know that risk and and hopefully the return that comes with it. Yeah, huge huge year last year and I can't believe we hadn't had you on the on the show with the amount of times we've had you on. Um I'm I'm curious to hear the the benchmark there right now because this is a for a lot of fund managers you've kind of touched on this but like gold for instance if we look at the ASX 300 I think it's like 20 20% of the >> it's getting up there >> the the market now. So, and and that's just gold. Like resources beyond that is at at another number of percent. I don't know what the exact number is, but if you're if you're one of those fundies that doesn't like to play in resources, you're you're between a rock and a hard place, aren't you? Oh, >> 100%. And um like last year, sorry, for calendar 25, the small resources index was up 70%. You know, that's that's crazy. Yeah, it was on an absolute tear. So if you um are sensitive to the um small odds index which are you know a large number of funds are um and you don't have any resources well it's going to really hurt uh and so you're um you're forced to cover that underweight. Now if you've got some resource investing experience then yeah great but if you don't well you're sort of groping around in in the dark there but you've got to solve that problem somehow. um because otherwise you're going to end up, you know, underneath your benchmark and you and you're not going to get paid. So um it just um all the outcome for that is that more money should be flowing into the space as um as time goes on. >> Yeah. And in a world in which the the ASX 10, ASX 20 are so richly valued like the banks, the com banks of the world at 25 times earnings, it becomes a real tough one for for the super funds, all these Aussie fund managers to kind of play. Yeah, it does. And I mean, I suppose the only frustration for, you know, people like me and the rest of the um commodity sort of fund managers that um that play our trade is that uh when you have these generalists coming into the space. I mean, it's great on the way in, but they don't like commodity investing is they they hate the space if to be frank and so you know, the moment that something wobbles or goes a little bit wrong like they sell and sell hard and and get out because they you know, >> they never wanted to be there. >> Exactly right. Exactly right. But um uh and that's fair that's fair enough, but it does make for a um an inefficient market where you know a small wrinkle can you know present as a buying opportunity I suppose um if you know the problem is not as great as as what a given share price reaction might imply. Um but you know that's what makes a market. So uh you know we take the other side of that reasonably regularly. >> Yeah. Yeah. Totally. Last one because I know you're a busy man and you've got to shoot Sammy but humanoid robots. I know you like to to see what the latest is and you you write about them fairly regularly and the advancements particularly in some of the Chinese ones has been >> pretty astounding. Now you can you can see a lot from a a YouTube promo video and maybe there's a bit more than meets the eye with with some of these but some of the stuff you do see is pretty pretty outstanding. So how do you think about this all when when are you thinking about buying your your first one? I I reckon by 2030 I suspect I'll probably have one in the house and I won't be alone. I certainly won't be a first adopter, but I might be a fast follower. >> How much do you think you'll be paying at that point in time? >> Well, um that uh Unit Tree, the humanoid robot from Unit Tree, which is sort of the price I've been tracking of the, you know, of all of them for for a while now, that's down to $13,500 um per unit. >> Is that is that US? Yeah, that's US. >> US. Yeah. >> Um, but for context, in September 2024, when I first looked at that, that same unit was 90,000 US. >> Um, so, you know, it's fallen in price by what circa 80% in a, you know, say a year and a half at while the functionality of these things has been getting better and better and better. >> That's like a like the solar chart that just got cheaper and cheaper and cheaper, except this sounds a lot more complex than a than a PV. >> Yeah. And I think the challenge for the functionality of them is that you know unlike the um large language models that all chat GPT and all that stuff um use for learning and training um the internet's just full of text and speech etc. So to learn to learn the language is um there's a massive data set there. The same data set doesn't exist for how humans move around the home, how you sort of open a a washing machine and fill it full of clothes, how you fold a shirt and all this sort of stuff. So these training models need to be built from scratch. Um and that is that's probably the the rate determining step for the adoption of these robots is and and how competent they become around the house. But um it will be it will be uh solved and whoever solves it first is going to be able to roll it into their robots and then put them into um you know envir various environments industrial as well as residential and that will accelerate the learning even more so as as that feedback mechanism starts to um starts to uh sort of roll. Um, and then, you know, the the the functionality of these things should go, you know, exponential. And if you really want to get hyperbolic about it, you can, you know, go down Elon's sort of rabbit hole where he reckons that, you know, there won't be any surgeons in whatever it is five or 10 years time because the robots will learn to do that job um so quickly and and and better than humans can. So, you know, he's obviously talking his own book, but it's it's not, you know, it's not um completely beyond the realms of of possibility that something like that could happen. >> And in 2030, will you be will will the average person in Perth be jumping into an an Uber, a DD or whatever that is, driverless? >> I think the technology will definitely be there. I think in a uh in Perth and and Australia in general, it's regulation which holds these things back. I mean, clearly you can already jump into driverless cabs in, you know, many cities in the US. You can't do it here yet, but it's coming for sure. >> All right, as always, fantastic to chat, Sammy. Thanks for making the time for us, and I'm sure the uh the listeners have taken a whole bunch from your your views as always. >> Absolute pleasure, Jay. Anytime. Always enjoy a chat with you guys. >> And a massive thank you to our awesome partners. 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